Southpasfan
Member
Its only complicated because right now the cost of everything other than electricity (I call it "the grid") is over 90% of everyone's bill.I'm going to say this again, this doesn't have to be that complicated. They need to throw out the old rate structures and have rate structures based on actual costs instead of artificially constructed rate structures if they expect credibility in the future.
Have a fixed residential connection fee for everyone regardless of what other forms of energy conservation or production they have. The connection fee structure should be directly related to what drives the IOU costs (peak power consumption, whatever). An additional fee should be added to the connection fee to subsidize those that would be regressively impacted by a fixed connection fee.
Have energy charges structured so they reflect the actual costs of providing energy during the different periods of the day, weekends, etc. An additional fee based on consumption from the grid should be added to subsidize those regressively impacted by the energy charges.
Have credit for energy sent to grid based on how much it would cost to get the energy from other sources during the time the energy is being provided to the grid.
If this rate structure doesn't provide enough incentive for customers to install renewable energy generators and storage then provide incentives from the general fund (renewable energy benefits everyone) or an additional fee on the energy charges. Any fees for incentives, subsidies, etc., should be listed separately on the bills for transparency.
I don't see how this could be considered unfair.
As a result, heavy users are subsidizing the grid to an extent the IOUs want to hide at all costs. Its amazing the arguments out there, including stuff like allocating the entire cost of peak plants to peak times!
A rate structure which allocates costs of the grid pro rata would results in higher bills for like 60 to 70% of all users, they will never do it.
You are correct in that if they redo it there will be no incentive for renewable energy, that's for sure.
I see throwing out the old rate structure as the key first step, for sure.